When looking to trade in a car that’s not paid off, you’ll have to see which category of equity you fall into:
To calculate which equity you have, you’ll have to find how much your current car is worth according to Kelley Blue Book® values and potential trade-in offers. If the trade-in offer is less than the amount you owe, then it is negative equity, but, if it is more than how much you still owe, then it is positive equity. Positive equity will make the trade-in process much easier as you don’t have to worry about outstanding payments and can use cash towards your next car.
Even if you have negative equity, you might be wondering if you still have the option to trade in your car that’s not paid off. These might be some good options to consider:
If what you still have to pay on the loan is less than what the car is actually worth, the dealer buying your vehicle will give you enough to pay the rest of the loan off. For example, if there is still $7,000 owed on your vehicle, and the dealer offers you $8,000 for it, the loan can be paid off and the dealership will then take the car. The $1,000 that is left over will be taken off the price of the new car that you buy.
Rolling over a loan is when a dealership offers to pay off your previous car regardless of the amount still owed on the loan. Keep in mind that the price will be added to your new loan on the next car you buy. You will end up paying the dealership back for the loan on your old car as you pay back the loan on the new car that you chose.
When you’re ready to trade in a financed car for lease or get behind the wheel of a new Acura, look no further than the extensive inventory of new Acura vehicles at Weir Canyon Acura near Tustin. We know that the car financing process can seem a bit overwhelming. That is why our finance experts are with you every step of the way or offer other features like how to calculate a car loan interest rate, how financing works, how to sell us your car, or good mileage for a used car. We strive to make car shopping hassle-free from start to finish. You can even learn more about fun things to do in Riverside. Contact us if you have any questions, or stop by our Anaheim dealership today.
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